'This Week' Transcript: Goolsbee, Brown & Corker

April 25, 2010

Page 8 of 15

TUCKER: No, and the Democrats don't either, for good reason. We
saw this tactic used with health care reform, when Max Baucus was given
months to negotiate with Republicans. At the end of the day there
wasn't a single Senate Republican voting for health care reform. So,
you know, Mitch McConnell came out just a few weeks ago and said, let's
start over with this financial reform bill. That was the very same
tactic used with health care reform. So Democrats need to be leery of
this idea of negotiate, negotiate, negotiate. It gives the lobbyists
time to lobby more, give more campaign contributions, and it gives the
Republicans time to foment opposition by mischaracterizing the bill. So
I think Chris Dodd is very leery.

(CROSSTALK)

TAPPER: Can I interject for one second on the campaign
contributions, and I'll come to you in a second, Paul. But the Center
for Responsive Politics did a study of campaign contributions, and in
this cycle, the finance, insurance and real estate sectors are giving
much more to Democrats than to Republicans. $65 million to $51
million. Paul, do you think the Democratic Party is too close to Wall
Street?

KRUGMAN: Well, it has been in the past for sure. No question that
in the late '90s, the Clinton team -- some of whom are now in the
administration -- were way too close to Wall Street. They believed that
these were wise men who knew what they were doing. And no, at this
point, it's the party in power, of course, is going to be getting a lot
more contributions. It's kind of -- that's not too surprising.

Let me say a couple of things here. Anyone who says we need to be
bipartisan should bear in mind that for the last several weeks, Mitch
McConnell, the Senate minority leader, has been trying to stop reform
with possibly the most dishonest argument ever made in the history of
politics, which is the claim that having regulation of the banks is
actually bailing out the banks. And basically, the argument boils down
to saying that what we really need to do to deal with fires is abolish
the fire department. Because then people will know that they can't let
their buildings burn in the first place, right? It's incredible.

So anyone who says bipartisan, should say, you know, bipartisan
doesn't include the Senate minority leader. But, you know, I agree with
George, actually, believe it or not. Too big to fail per se is not the
problem. The Great Depression was made possible by the failure of the
Bank of the United States, which despite its name, was a Bronx-based
institution that was the 28th largest financial institution in the
United States at the time, and yet brought the whole system down.

But what we are getting now in this bill is a way to have graceful
failure of big institutions, right? We know how to deal with small
banks. The FDIC seized seven banks last week that were on the verge of
failing and let them, you know, liquidated them gracefully, but we don't
have a way of dealing with complex, you know, what we call shadow
banking institutions like Lehman or Citigroup. And this bill would give
you that. So it would give you the ability to do for big, complicated
financial institutions what we've been doing routinely for small ones,
and that does -- so it doesn't end the too big, but it may deal with the
fail bit.